Global| Dec 08 2014NABE Maintains Forecast of Improving Economic Growth
by:Tom Moeller
|in:Economy in Brief
Summary
The National Association for Business Economics continues to forecast improvement in U.S. real economic activity. Expectations were little-changed from September for 3.1% real GDP growth in 2015 and 2.2% for this year. Quarterly [...]
The National Association for Business Economics continues to forecast improvement in U.S. real economic activity. Expectations were little-changed from September for 3.1% real GDP growth in 2015 and 2.2% for this year. Quarterly growth is expected to hold fairly steady at 3.0%. Expected personal consumption expenditures growth was roughly unchanged at a moderate 2.7%, its quickest growth rate since 2006. Growth in business investment in equipment & software is expected to remain firm at 4.3% while growth in spending on nonresidential structures may slip a bit to 5.5%. Residential investment should continue to be the economy's strongest sector with a lessened 7.0% increase forecast in 2015 after a 1.7% rise this year. The rate of inventory investment should diminish next year after remaining little-changed 2014 gain. Real net exports are expected to deteriorate slightly.
Forecasts for housing starts again were little-changed at 1.15 million in 2015 following 1.00 million this year while expectations for light vehicle sales were unchanged at 16.8 million after an expected 16.4 million in 2014. Forecasted average monthly gains in payroll employment were little-changed at 217,000 next year after 226,000 this year. The unemployment rate forecast average was lessened to 5.6% next year after 6.2% this year. The forecast for consumer price inflation was lowered to 1.7% for next year from 2.1% expected earlier.
The forecasted 3.20% interest rate on 10-year Treasury notes at the end of next year is lower than projected earlier and compares to a downwardly revised estimate of 2.50% at the end of this year. The Fed is expected to raise rates in the third quarter of 2015, pushed back from the earlier forecast of a Q2 increase. The forecasted 6.7% gain in corporate profits next year, following 4.7% growth this year, was little-changed. The Federal government budget deficit is expected to shrink to a lessened $460 billion in 2015, roughly one-third its $1.4 trillion peak in 2009.
The figures from the latest NABE report can be found in Haver's SURVEYS database.
| National Association For Business Economics | 2015 | 2014 | 2013 | 2012 |
|---|---|---|---|---|
| Real GDP (% Chg. SAAR) | 3.1 | 2.2 | 2.2 | 2.3 |
| Personal Consumption Expenditures | 2.7 | 2.2 | 2.4 | 1.8 |
| Nonresidential Structures | 5.5 | 7.9 | -0.5 | 13.1 |
| Nonresidential Equipment & Software | 4.3 | 3.9 | 4.6 | 6.8 |
| Residential Investment | 7.0 | 1.7 | 11.9 | 13.3 |
| Change in Real Business Inventories (Bil. $) | 57.8 | 62.0 | 63.5 | 57.0 |
| Real Net Exports (Bil. $) | -438.0 | -433.4 | -420.4 | -452.5 |
| Housing Starts (Mil. Units) | 1.15 | 1.00 | 0.92 | 0.78 |
| Light Vehicle Sales (Mil. Units) | 16.8 | 16.4 | 15.5 | 14.4 |
| Payroll Employment Average Monthly Change (000s) | 217 | 226 | 194 | 186 |
| Unemployment Rate (%) | 5.6 | 6.2 | 7.4 | 8.1 |
| Consumer Price Index (Y/Y %) | 1.7 | 1.7 | 1.5 | 2.1 |
| Fed Funds Rate (%, Year End) | 0.75 | 0.125 | 0.125 | 0.125 |
| 10-Year Treasury Note (%, Year End) | 3.20 | 2.50 | 3.04 | 1.78 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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